Around 650 Eftpos terminals will be disconnected today because retailers have failed to upgrade the machines to the latest requirements.

There are 4000 terminals - including those that will be disconnected today - that have not been upgraded to the new specifications despite numerous letters, phone calls and warnings from provider Paymark.

Over the next four weeks the remaining terminals will be shut down across the country. Paymark is spacing the process out to allow last-minute upgrades.

Paymark chief executive Simon Tong said 98 per cent of all terminals had been upgraded, which is a "phenomenal effort by the retail community".

Tong added that Paymark did not want to disconnect retailers' terminals but that June 1, 2011, had been the deadline for software upgrades and the company was going to "stick to its guns".

"The people I am talking about we have rung five times, we have sent them six letters, we have gone across the media to try and contact them, we have company searched them, Googled them. You name it, we have tried it.

"Most of them [retailers] have made an effort and are up and running, 98 per cent of transactions are on compliant terminals and we are just trying to get these last few people across the line. We need to stick to our guns, if we back off that, if will annoy merchants who have upgraded," Tong said.

The new Eftpos terminals will be able to read most international credit and debit cards that have chips embedded in them, the chips offer customers and retailers greater security when processing transactions.

Tong said in March that this facility would become important during the Rugby World Cup when retailers will be processing payments with cards from all over the world.

Yesterday, Tong was urging retailers with old machines to urgently upgrade their technology to avoid being reduced to receiving cash-only payments.

"The last thing we want to do is stop people trading. We have attempted to contact those who have not upgraded many times, including informing them of the exact week in which their terminal will cease to operate. If you continue to use an old terminal you can expect it to stop working very shortly."